2016 North Dakota Century Code Title 57 Taxation Chapter 57-62 Impact Aid Program
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CHAPTER 57-62
IMPACT AID PROGRAM
57-62-01. Definitions.
As used in this chapter, unless the context or subject matter otherwise requires:
1. "Coal development" means the mining of coal and industries directly related to the
processing of coal, including the generation of electricity from coal or coal products,
coal gasification, coal liquefaction, and the manufacture of fertilizer from coal.
2. "Impacted city" means a city which demonstrates actual or anticipated extraordinary
expenditures caused by coal or oil and gas development and the growth incidental
thereto.
3. "Impacted county" means a county which demonstrates actual or anticipated
extraordinary expenditures caused by coal or oil and gas development and the growth
incidental thereto.
4. "Impacted school district" means a public school district which demonstrates actual or
anticipated extraordinary expenditures caused by coal or oil and gas development and
the growth incidental thereto.
5. "Impacted taxing district" means a taxing district as defined in subsection 7 which
demonstrates actual or anticipated extraordinary expenditures caused by coal or oil
and gas development and the growth incidental thereto.
6. "Oil and gas development" means the exploration for and production of oil and gas
and industries directly relating to the refining or processing of the oil or gas.
7. "Taxing district" means any political subdivision, other than those included in
subsections 2 through 4, empowered by law to levy taxes.
57-62-02. Allocation of moneys in coal development fund
Moneys deposited in the coal development fund shall be apportioned monthly by the state
treasurer as follows:
1. Thirty percent must be deposited in a permanent trust fund in the state treasury, to be
known as the coal development trust fund, pursuant to section 21 of article X of the
Constitution of North Dakota. Those funds held in trust and administered by the board
of university and school lands on March 5, 1981, pursuant to section 12, chapter 563,
1975 Session Laws; section 12, chapter 560, 1977 Session Laws; or section 13,
chapter 626, 1979 Session Laws must also be deposited in the trust fund created
pursuant to this subsection. The fund must be held in trust and administered by the
board of university and school lands for loans to coal-impacted counties, cities, and
school districts as provided in section 57-62-03 and for loans to school districts
pursuant to chapter 15.1-36. The board of university and school lands may invest such
funds as are not loaned out as provided in this chapter and may consult with the state
investment board as provided by law. The income, including interest payments on
loans, from the trust must be used first to replace uncollectible loans made from the
fund and the balance must be deposited in the school construction assistance loan
fund. Loan principal payments must be redeposited in the trust fund. The trust fund
must be perpetual and held in trust as a replacement for depleted natural resources
subject to the provisions of this chapter and chapter 15.1-36.
2. Seventy percent must be allocated to the coal-producing counties and must be
distributed among such counties in such proportion as the number of tons [metric tons]
of coal severed at each mining operation bears to the total number of tons [metric
tons] of coal severed in the state during such monthly period. Allocations under
subdivisions a and b must be apportioned by the state treasurer as follows:
a. If the tipple of the currently active coal mining operation in a county is not within
fifteen miles [24.14 kilometers] of another county in which no coal is mined, the
revenue apportioned according to this subdivision must be allocated as follows:
(1) Thirty percent must be paid by the state treasurer to the incorporated cities
of the county based upon the population of each incorporated city according
to the last official regular or special federal census or the census taken in
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b.
accordance with the provisions of chapter 40-02 in case of a city
incorporated subsequent to such census.
(2) Forty percent must be paid to the county treasurer who shall deposit it in the
county general fund to be used for general governmental purposes.
(3) Thirty percent must be apportioned by the state treasurer to school districts
within the county on the average daily membership basis, as certified to the
state treasurer by the county superintendent of schools.
If the tipple of a currently active coal mining operation in a county is within fifteen
miles [24.14 kilometers] of another county in which no coal is mined, the revenue
from the production not exceeding the production limitation in a calendar year
which is apportioned from that coal mining operation according to this subsection
must be allocated, subject to the definitions of terms and the requirements in
paragraph 4, as provided in this subdivision. For purposes of this subdivision, the
production limitation is three million eight hundred thousand tons [3447302.02
metric tons] through calendar year 1995, three million six hundred thousand tons
[3265865.07 metric tons] in calendar years 1996 and 1997, and three million four
hundred thousand tons [3084428.12 metric tons] in calendar years after 1997.
Revenue from production exceeding the production limitation in a calendar year
from that coal mining operation must be allocated only within the coal-producing
county under subdivision a. Allocations under this subdivision must be made as
follows:
(1) Thirty percent must be paid by the state treasurer to the incorporated cities
of the coal-producing county and to any city of a non-coal-producing county
when any portion of the city lies within fifteen miles [24.14 kilometers] of the
tipple of the currently active coal mining operation in the coal-producing
county, based upon the population of each incorporated city according to the
last official regular or special federal census or the census taken in
accordance with the provisions of chapter 40-02 in case of a city
incorporated subsequent to such census.
(2) Forty percent must be divided by the state treasurer between the general
fund of the coal-producing county and the general fund of any
non-coal-producing county when any portion of the latter county lies within
fifteen miles [24.14 kilometers] of the tipple of the currently active coal
mining operation in the coal-producing county. The non-coal-producing
county portion must be based upon the ratio which the assessed valuation
of all quarter sections of land in that county, any portion of which lies within
fifteen miles [24.14 kilometers] of the tipple of the currently active coal
mining operation, bears to the combined assessed valuations of all land in
the coal-producing county and the quarter sections of land in the
non-coal-producing county within fifteen miles [24.14 kilometers] of the
tipple of the currently active coal mining operation. The county director of tax
equalization of the coal-producing county shall certify to the state treasurer
the number of quarter sections of land in the non-coal-producing counties
which lie at least in part within fifteen miles [24.14 kilometers] of the tipple of
the currently active coal mining operation and their assessed valuations.
(3) Thirty percent must be apportioned by the state treasurer to school districts
within the coal-producing county and to school districts in adjoining
non-coal-producing counties when a portion of those school districts' land
includes any of the quarter sections of land certified by the director of tax
equalization to the state treasurer to be eligible to share county funds as
provided for in paragraph 2. The county superintendent of the
non-coal-producing counties shall certify to the state treasurer the number of
students actually residing on these quarter sections lying outside the
coal-producing county and each school district in non-coal-producing
counties shall receive a portion of the money under this paragraph based
upon the ratio of the number of children residing on quarter sections of that
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(4)
(5)
school district within the fifteen-mile [24.14-kilometer] radius of the tipple of
a currently active coal mining operation to the total number of schoolchildren
from the coal-producing county combined with all the schoolchildren certified
to be living on quarter sections within fifteen miles [24.14 kilometers] of the
tipple of the currently active coal mining operation in the coal-producing
county.
For the purposes of this subdivision:
(a) The terms "currently active coal mining operation in a county",
"currently active coal mining operation in the coal-producing county",
and "currently active coal mining operation" mean a coal mining
operation that produced more than one hundred fifty thousand tons
[136077.71 metric tons] of coal in a coal-producing county during the
prior quarterly period.
(b) The term "coal-producing county" means a county in which more than
one hundred fifty thousand tons [136077.71 metric tons] of coal were
mined in the prior quarterly period.
(c) The term "another county in which no coal is mined" means a county
in which not more than seventy-five thousand tons [68038.86 metric
tons] of coal were mined in the prior quarterly period.
(d) The terms "non-coal-producing county" and "non-coal-producing
counties" mean any county in which not more than seventy-five
thousand tons [68038.86 metric tons] of coal were mined in the prior
quarterly period.
(e) In computing each amount to be paid as provided in paragraph 1, 2, or
3 for coal severance tax revenue from coal mined during a monthly
period, the state treasurer shall deduct from the allocation the amount
of coal severance tax revenue, if any, that the governmental body in
the non-coal-producing county received from the coal mined in the
non-coal-producing county during the same monthly period.
The state treasurer shall allocate funds provided by legislative appropriation
to cities, the county general fund, and school districts within a
coal-producing county according to the allocation method provided in
subdivision a in an amount to offset fifty percent of the loss of that county's
share of coal severance tax revenue allocated to a non-coal-producing
county under this subdivision in the previous calendar year. The state
treasurer shall make the allocation and distribute the funds, within the limits
of legislative appropriations, under this paragraph during the first month of
each calendar year. The state treasurer shall include in each biennial budget
request the amounts estimated to be necessary for the biennium for
purposes of this paragraph, based on the allocations under this subdivision
in the most recent calendar years.
57-62-03. Loans - Terms and conditions - Repayment.
The board of university and school lands is authorized to make loans to coal
development-impacted counties, cities, and school districts before or after the beginning of
actual coal mining from moneys deposited in the coal development trust fund established by
subsection 2 of section 57-62-02. Loans made prior to actual mining must be preceded by site
permitting and by beginning actual construction of the mine or its mine mouth facility. Loans may
be made for any purpose for which a grant may be made pursuant to this chapter, but before
making any loan the board of university and school lands shall receive the recommendation of
the energy infrastructure and impact office. The board of university and school lands shall
prescribe the terms and conditions of such loans within the provisions of this chapter and shall
require a warrant executed by the governing body of the county, city, or school district as
evidence of such loan. The warrants must bear interest at a rate not to exceed six percent. The
warrants shall be payable only from the allocations of moneys from the coal development fund
to the borrowing county, city, or school district and shall not constitute a general obligation of the
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county, city, or school district nor may such loans be considered as indebtedness of the county,
city, or school district. Loans made in advance of actual coal mining must provide that
repayment is to begin when the borrowing county, city, or school district receives allocations
from the coal development fund. The terms of the loan must provide that not less than ten
percent of each allocation made to the borrowing county, city, or school district pursuant to this
chapter must be withheld by the state treasurer to repay the principal of the warrants and the
interest thereon. The amount withheld by the state treasurer as payment of interest must be
deposited in the general fund and the amount withheld by the state treasurer as payment of
principal must be remitted to the board of university and school lands and deposited by the
board in the trust fund provided for in subsection 2 of section 57-62-02. The warrants executed
by the county, city, or school district have all of the qualities and incidents of negotiable paper
and are not subject to taxation by the state of North Dakota or by any political subdivision
thereof.
The board of university and school lands is authorized to sell such warrants to other parties
and the proceeds of such sale which constitute principal must be deposited in the coal
development trust fund and that which constitutes interest in the general fund. If the future
allocations of moneys to the borrowing county, city, or school district should, for any reason,
permanently cease, the loan shall be canceled except that if the county, city, or school district is
merged with another county, city, or school district which receives an allocation of moneys from
the coal development fund, the surviving county, city, or school district is obligated to repay the
loan from such allocation. If the loan is canceled due to the permanent cessation of allocations
of moneys to the county, city, or school district pursuant to this chapter, the board of university
and school lands shall cancel those warrants it holds from such county, city, or school district
and shall pay from any moneys in the trust fund provided for in subsection 2 of section 57-62-02
the principal and interest, as it becomes due, on those warrants of the county, city, or school
district which are held by another party.
57-62-03.1. Oil and gas impact grant fund.
The moneys accumulated in the oil and gas impact grant fund must be allocated as
provided by law and as appropriated by the legislative assembly for distribution through grants
by the energy infrastructure and impact office to oil and gas development-impacted cities,
counties, school districts, and other taxing districts or for industrial commission enforcement of
laws and rules relating to geophysical exploration in this state.
57-62-04. Energy infrastructure and impact office - Appointment of director.
There is hereby created an energy infrastructure and impact office, to be a division within
the office of the commissioner of the board of university and school lands, the director of which
must be appointed by and serve at the pleasure of the board of university and school lands. The
director shall have knowledge of state and local government and shall have experience or
training in the fields of taxation and accounting. The salary of the director must be set by the
commissioner of university and school lands within the limits of legislative appropriations. The
director may employ such other persons as may be necessary and may fix their compensation
within the appropriation made for such purpose. The board of university and school lands shall
fill any vacancy in the position of director in the same manner as listed above. All action by the
board of university and school lands, including appointment of a director, must be by majority
vote.
57-62-05. Powers and duties of energy infrastructure and impact office director.
The energy infrastructure and impact office director shall:
1. Develop a plan for the assistance, through financial grants for services and facilities, of
counties, cities, school districts, and other political subdivisions in coal development
and oil and gas development impact areas.
2. Establish procedures and provide proper forms to political subdivisions for use in
making application for funds for impact assistance as provided in this chapter.
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3.
4.
5.
Make grants disbursements to counties, cities, school districts, and other taxing
districts for grants awarded by the board of university and school lands pursuant to
chapter 15-01, as provided in this chapter and within the appropriations made for such
purposes. In determining the amount of impact grants for which political subdivisions
are eligible, consideration must be given to the amount of revenue to which such
political subdivisions will be entitled from taxes upon the real property of coal and oil
and gas development plants and from other tax or fund distribution formulas provided
by law.
Receive and review applications for impact assistance pursuant to this chapter.
Make recommendations to the board of university and school lands on grants to
counties, cities, school districts, and other political subdivisions in oil and gas
development impact areas based on identified needs, and other sources of revenue
available to the political subdivision.
57-62-06. Legislative intent and guidelines on impact grants.
The legislative assembly intends that the moneys appropriated to, and distributed by, the
energy infrastructure and impact office for grants are to be used by grantees to meet initial
impacts affecting basic governmental services, and directly necessitated by coal development
and oil and gas development impact. As used in this section, "basic governmental services" do
not include activities relating to marriage or guidance counseling, services or programs to
alleviate other sociological impacts, or services or facilities to meet secondary impacts. All grant
applications and presentations to the energy infrastructure and impact office must be made by
an appointed or elected government official.
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